On Halloween, I read in the Los Angeles Times that starting the next day, the California government would be holding back 10 percent more than it already does in state income taxes. At first, I thought it was some sort of sick Halloween joke. But it wasn’t. Maybe worse, the newspaper tried to make the case for the “not technically a tax” withholding by saying:

Think of it as a forced, interest-free loan: You’ll be repaid any extra withholding in April. Those who would receive a refund anyway will receive a larger one, and those who owe taxes will owe less.

I can only imagine what the LA Times would say if a bank with cash-flow problems started to take money out of its customers’ bank accounts, out of the blue without authorization, just because it needed it and would pay it back later. I bet that this seizure of property would be rightfully be called robbery by the newspaper. So why hold the government of California to different standards?

Finally, this morning the Wall Street Journal asks another very relevant question:

What happens come April if the state doesn’t have enough money to pay the tax refunds it owes its citizens? Will taxpayers get IOUs the way state contractors did last year when Sacramento ran out of money?

And here is my question: Is the state really allowed to do that? I would appreciate any information on the ability of the state, or even other states, to adopt such measures. Thanks.